Defiant Iran says EU’s oil embargo won’t work

A GIFT?A conservative Iranian news Web site said the embargo would help teach the nation how to reduce its economic reliance on oil revenues

AP, TEHRAN and LONDON

Tehran has shrugged off a new EU ban on the purchase of Iranian oil, with officials declaring that the country can find new markets for its oil.

Some commentators are declaring that Iran should cut the flow of crude even before the new measures go into effect in July, to punish Europe, while others say the embargo is a “gift” which will allow the country to diversity its economy.

The EU imposed an oil embargo against Iran on Monday, part of sanctions to pressure Tehran into resuming talks on the country’s controversial nuclear program.

Tehran’s initial response was to treat the embargo as an act of aggression, with the foreign ministry declaring the measures “propaganda and psychological war,” and two lawmakers repeating long-standing threats that the country would close the strategic Strait of Hormuz in retaliation.

However, other officials took a slightly different tack, arguing that the sanctions would not work.

“The world economy is not such that a decision can deprive a country of its existence,” the country’s intelligence chief Heidar Moslehi was quoted as saying yesterday by the state IRNA news agency.

“Ineffective Western sanctions are not a threat to us, but an opportunity that has brought a lot of benefits,” Moslehi said at a gathering in the central city of Isfahan late on Monday.

The “benefits,” he said, were that Iran was becoming self-sufficient, instead of relying on the outside world to meet all its needs.

The measures, approved in Brussels by the EU’s 27 foreign ministers, include an immediate embargo on new contracts for crude oil and petroleum products. Existing contracts with Iran will be allowed to run until July.

The Iranian Oil Ministry said the country could find new markets.

“Iran can easily find new customers for its oil,” Mohsen Qamsari, a senior ministry official, was quoted by the semiofficial Mehr news agency as saying. “The National Iranian Oil Company has adopted the necessary measures to replace its oil exports in 2012.”

About 80 percent of Iran’s foreign revenue comes from oil exports, and analysts say that any sanctions affecting its ability to export oil would hit its economy hard. With about 4 million barrels per day, Iran is the second largest producer in OPEC. It exports about 2 million barrels a day and consumes the rest domestically.

The EU has been importing about 450,000 barrels of oil per day from Iran, making up 18 percent of Iran’s oil exports.

Some in Iran said the country should stop selling oil to Europe now, instead of July, to punish the bloc before it can find suppliers to replace Iranian crude oil in the midst of winter.

“The Iranian people now expect that the flow of black gold to Europe be cut before it can find a replacement for Iranian oil,” state radio said in a commentary.

The conservative news Web site, mashreghnews.ir, called the embargo a “gift.”

“Iran’s economy has been dependent on oil revenues for a century. Now, it is facing a serious test of how to reduce reliance on oil revenues,” it said. “The oil embargo is a gift. If the West knew its benefits for Iran, it would never enter such a game.”

The US has also enacted new sanctions targeting Iran’s central bank and its ability to sell petroleum abroad over Tehran’s nuclear program. The US has delayed implementing the sanctions for at least six months.